The Tug-of-war Between Physical And Digital Shopping

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In March of 2019, Soumen Ghosh, a visiting US professor of operations and supply chain management, delivered one of the business world’s more earth-shattering lectures on disruptive technologies at the Gordon Institute of Business Science in Johannesburg.

He understood, back then, that young consumers will and had already been changing the way businesses package their goods and services. No longer would the consumer take home what they were given. Businesses would have to offer customised goods and services based on individual needs and desires, which is changing the physical retail landscape and it’s all thanks to the small device we all carry around in our pockets: the smartphone.

Generation Z, in particular, is leading the charge a great chunk of this age group, born between 1995 and 2009, are already in the workforce and their shopping habits are almost always embedded in the digital retail realm. They make up 26 percent of the population and soon, they will all be working and determining how businesses should run.

In the same address at GIBS, Ghosh said that in as little as five years’ time, most retailers as we know them will be moving their enterprise online, leading to the retail apocalypse. Most brick-and mortar stores will be dedicated showrooms where, for instance, customers can try on a jacket before purchasing it online.

If we look at some of the numbers from major retailers around the globe, you might just think we are witnessing the demise of physical stores. Charlotte Russe is closing all of its 416 stores, Gap is shedding 230 store locations, Victoria’s Secret is cutting 53 stores, JC Penney is shutting 27 stores and jeans manufacturer Diesel has filed for bankruptcy in the US.

But we can argue against that. Yes, the future of retail as we know it is no longer a case of “one-size-fits-all”.

Technological advancements have forced retailers to evolve, to draw in Gen Z consumers. We can see why one would think that Gen Z tech savviness would lead to the end of brick-and-mortar stores. However, this has not happened and these consumers now represent the future of retail – a future as much about the personal in-store experience as the purchase itself; a holistic experience, driven and enhanced by technology, rather than replaced by it.

Statistics South Africa found in its retail report from August this year, that trade sales have increased year-on-year by 2.4 percent in the second quarter of 2019 and 1.1 percent compared to the first quarter. The main contributors to the increase were clothing, footwear, leather goods and general dealers. Sectors that recorded the largest annual growth sales include household furniture and appliances which grew by 5.2 percent and clothing which showed growth of almost 5 percent year-on-year.

These are the very sectors that we expect to decline yet they are doing better than food, beverages and tobacco, which had experienced -0.1 percent growth – products that we expect to remain on a steady upward trajectory.

Online shopping may be able to inspire, gratify and offer convenience for consumers but it is clear, at least for now, that digital cannot replace to action – the need to touch, feel and try products – as it boosts confidence in a purchase. Well, not yet at least. And even if it gets taction right in the future, it would not be able to replace the experience of a physical environment – the memory and social delight of being somewhere.